VR Logo

Market falls, Gold rises

Market falls, Gold rises

The ongoing deterioration of the global economy has led to gold shining through. The yellow metal touched new highs this week.

Gold touched $985.95/ounce on Thursday, its highest level in 7 months. Raghavan Sundarajan of Kotak Commodities was on TV recently saying that it is a good time to get into gold. According to him, gold was in the overbought zone so profit taking would be expected. He felt $965-945 is a good level to re-enter gold. He felt that gold will move to $1030 in the near term.

The 4 ETFs (Gold Benchmark, Kotak Gold, Reliance Gold, UTI Gold) have delivered 1-year returns between 29.25% and 31.40%.

With gold prices moving up and energy and other input costs falling, mining company profit margins are expected to widen, making their shares attractive in the future. But right now, DSPBR World Gold, which invests in gold mining stocks, has a 1-year return of -17.15%.